Are you also saving for retirement?

mitchaa

chewmylegoff wrote: »

since you're saying 68, i'm going to assume you're not retiring until at least 2045.

if there is still a state pension for all by then i will eat kirsty allsop's hat.

i assume it will be means tested by then, probably the only way it will continue to be affordable is to stop paying it to people who can afford to do without it (regardless of whether they feel it is owed to them via the tax and NI they have paid).

Yep pretty much my thoughts too, my 68th birthday falls in 2051.

Pobby

Yep, I have a Company/Personal Pension and/or ISA savings

It is surprising how it all adds up. I paid a teeny pension in my 20s. That was frozen, maybe not good advice. Paid a bigger one in my 30`s which is still ongoing and paid a lump sum into one in my 40`s. Mrs. P has 2 company pensions, a small lump sum deposit and an on going £100 per month contribution which has been going for years.

Add in a full pension each plus a bit of serps and then accessing our other provisions, our aim is for an income close to 2 thirds of what we get in employment.

In fact the other thing to remember is outgoings should go down in retirement. Hopefully the mortgage is cleared, that`s the big one and that`s been out of the way for a while. We will be down to one little run around car. Currently we run 2 as we both need them for our work. Btw, mine is fairly big as I need the headroom lol.

In retirement paying into pensions clearly stops so another saving there. Although small there is a heating subsidy which is not means tested.

Holidays abroad are nice and hopefully in retirement they can be taken well off season when they are very cheap. So all in all it shouldn`t be so bleak.

I did a little bit of an soa and found that 2 of us could live very well on £42 a day, averaged over the year that would include all the bills and still leave something for a beer or 27 lol.

kennyboy66_2

Yep, I have a Company/Personal Pension and/or ISA savings

Conrad wrote: »

Pensions die with you once you pass retirment age. I have frozen mine, and prefer other methods, which, can be left in tact for my children.

Surely it depends on what type of annuity you buy, and how you insure against an early death if you want.
Or what if you take a draw down pension ?

Add to this that you can normally take 25% out tax-free.

I personally think many people would be better off, putting money into a pension fund than paying off their mortgage.

longtimelurker_2

Yep, I have a Company/Personal Pension and/or ISA savings

Dithering_Dad wrote: »

That's a really decent amount to be putting away at your age. The rule of thumb seems to be that the earlier you start paying into a pension, the longer the investment has to grow and the less you have to pay into it.

I remember seeing an article where it said you'd have to pay twice as much into a pension each month if you start it at age 40, then if you started one at age 20. The numbers are probably incorrect, but you get the idea.

Definitely food for thought. OH's is an NHS pension and as he's signed up now should still get a good whack at 60 if all career progression goes to plan.

Will have to start considering life assurance/insurance soon though (already have career, income and defence insurances)!

housesitter

Yep, I have a Company/Personal Pension and/or ISA savings

I voted for the top option but honestly I think you need another choice on the poll:

Yep, I have a Company/Personal Pension and/or ISA savings but I'm also saving for a house and keeping it seperate.

I've got ISA's for my pension. My work offers a 5% employer scheme, but I don't like the idea of annuity pensions. I'd rather be fully in control of the purse strings. I've listened to what people say and I'm willing to accept that if I've made the wrong choice it's my own fault 100%. I have a bad feeling that by the time I retire at 70 (realistically) they will have been nobbled yet further and I potentially would have lost out.

Whilst it is tempting to dip into the ISA's to give me a bigger pension pot, I'm 30 and starting over would be madness just to buy a house. If I have to dip, it obvious to me that I cannot afford it.
I'm still considering renting for life.

Generali

Yep, I have a Company/Personal Pension and/or ISA savings

Dithering_Dad wrote: »

Just been having a bit of a pensions/retirement chat with Pobby on another thread and it made me think about whether those people in here, who are saving like mad for a house deposit (and prudently waiting for house prices to normalise), are also making sure they're saving for their old age.

I also contribute on the MFW board and one of the accusations directed against MFW's is that we're putting too much money into a single asset (our houses) and neglecting other investments such as our emergency and retirement savings. A quick straw poll found that most of us had company pensions and sufficient emergency savings and that we only paid spare money onto the mortgage after paying into both of these.

As saving into a house purchase pot is very similar to overpaying into a mortgage pot, I thought it'd be interesting to do the same straw poll here.

Probably worth remembering that this is a self-selecting group who are likely to be financially savvy.

Really2

I will worry about this once I have bought my house!

housesitter wrote: »

I'm still considering renting for life.

Thats OK as long as you can get a council bungallow.:eek:
Your retirement is likely to longer than the time it would take to pay off a mortgage.

Dithering_Dad

Yep, I have a Company/Personal Pension and/or ISA savings

Generali wrote: »

Probably worth remembering that this is a self-selecting group who are likely to be financially savvy.

Which group? The MFW or the HPC (or both)?

I agree with you that people on MSE are likely to be a bit more savvy than most 'civilians', but I have found that contributors to both the MFW and HPC boards have prejudices against pensions that are outdated, so it's always worth raising discussions about pensions outside the Pension Board in order to spread the word.

The usual ones are:

1) Pensions are unsafe and will be robbed (ala Robert Maxwell) - In fact, the security covering pensions is far greater than those covering savings (as we have seen with the recent bank crashes).

2) My pension will be eaten up by bonuses to City Fat Cats! - You can get stakeholder pensions that have tiny management charges (0.3%) and you can invest in Tracker funds that do not have any managers and therefore have very low charges.

3) My pension dies with me - You can choose to buy an annuity or keep your pension invested and use 'drawdown' (upto age 70, though I'd expect this rule to go long before I retire). If you have an annuity you can choose to pay a 100%/50%/30%/etc pension to your spouse. If you choose drawdown, then your entire fund value is paid to your beneficiary WITHOUT inheritance taxes! Plus you can take a tax free lump sum of 25% out of the pension pot when you retire.

housesitter

Yep, I have a Company/Personal Pension and/or ISA savings

The pension issue is more about value. Whilst it was an option to join last year in April. I think I made the right decison. It may be revisited but it'll be a while. For security, see share prices.

It's a long, long time to wait to see your money again. I have a big problem trusting the people looking at it and whatever conditions a future government may bring in to suit their will.

You nor I can say exactly what punative or indeed beneficial measure may be brought in at a future date.


Annuities. Why buy an annunity. If it's about looking after my well being in retirement, how about the option to take a 100% lump sum tax free? hmmm, ah yes. Govt want's their cut in the name of your benefit.

The idea that I pay into a fund my whole working life to buy a wage from it doesn't sit well with me. Granted, they may loose out if I live to 120, but realistically I'll be living about 20years past retirement. There is the profit margin for the "city fat cats".

I'll go and read more about drawdowns and I may well change my views.
Your point about posting outside of the pensions area is a good one indeed.

kennyboy66_2

Yep, I have a Company/Personal Pension and/or ISA savings

housesitter wrote: »

I've got ISA's for my pension. My work offers a 5% employer scheme, but I don't like the idea of annuity pensions. I'd rather be fully in control of the purse strings. I've listened to what people say and I'm willing to accept that if I've made the wrong choice it's my own fault 100%. I have a bad feeling that by the time I retire at 70 (realistically) they will have been nobbled yet further and I potentially would have lost out.

Do you mean is that you chip in 5% & your employer matches it ?

If so you really should reconsider. Although pensions lack some flexibility, the fact that your employer contibutes, plus the tax advantages that you own contibution mean that you each £80 net you put in, your fund gets £20 from the tax man and another £100 from your employer.

If its a company scheme then "fat cat" charges are probably as low as they can be.

You cant really expect to take you pension tax free when you had the tax benefit in the first place, but you can take 25% as a lump sum tax free.

If you are a 40% taxpayer the advantages are even greater - most people would get 40% tax relief now & pay only 20% (or basic rate) when they take their pension.